AAVAHRNAM MARKETING, Jaipur v. DCIT, CIRCLE-6, Jaipur

ITA 279/JPR/2011 | 2005-2006
Pronouncement Date: 28-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 27923114 RSA 2011
Bench Jaipur
Appeal Number ITA 279/JPR/2011
Duration Of Justice 3 month(s) 24 day(s)
Appellant AAVAHRNAM MARKETING, Jaipur
Respondent DCIT, CIRCLE-6, Jaipur
Appeal Type Income Tax Appeal
Pronouncement Date 28-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 28-07-2011
Assessment Year 2005-2006
Appeal Filed On 04-04-2011
Judgment Text
1 ITA 279-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 279/JP/2011 ASSTT. YEAR : 2005-06. M/S. AAVAHRNAM MARKETING VS. THE DCIT CIRCLE-6 105 USHA COLONY JAIPUR. MALVIYA NAGAR JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MANISH AGARWAL RESPONDENT BY : SHRI K.C. MEENA ORDER DATE OF ORDER : 28/07/2011. PER R.K. GUPTA J.M. THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE IS OBJECTING IN CONFIRMING DISALLOW ANCE OF RS. 73 028/- OUT OF GUEST HOUSE EXPENSES AND CONFIRMING 20% DISALLOWANCE OUT OF CONVEYANCE EXPENSES AND DEPRECIATION ON CAR FOR PERSONAL USE. 3. THE ASSESSEE HAS TAKEN A GUEST HOUSE ON RENT AT NEW DELHI FOR ITS BUSINESS USE. AS ASSESSEE HAS RETAIL OUTLET AT DELHI AND THE KEY STAFF WAS SENT FROM JAIPUR BEING LEGAL AND FAITHFUL TO THE MANAGEMENT FOR SMOOTH RUNNING AND CONTROL OVER THE TRANSACTIONS BEING INVOLVED PRECIOUS METALS AND THEREFORE THE S TAFF WAS PROVIDED GUEST HOUSE FOR THE STAY IN DELHI. THE TOTAL EXPENSES INCURRED TOWARDS THE DAILY RUNNING AND MAINTENANCE WAS TO THE TUNE OF RS. 73 028/- WHICH INCLUDED THE EXPENSES ON FOOD AND OTHER 2 MISCELLANEOUS EXPENSES INCURRED ON DAILY BASIS. CO PY OF LEDGER ACCOUNT OF GUEST HOUSE EXPENSES CONTAINING SUCH DETAILS WERE FILED BEFORE THE AO. HOWEVER THE AO WAS NOT SATISFIED. THEREFORE HE DISALLOWED THE EXPENDITUR E BY OBSERVING THAT THE EXPENDITURE INCURRED BY ASSESSEE IS NOT WHOLLY FOR BUSINESS PUR POSE. THE LD. CIT (A) ALSO CONFIRMED THE ACTION OF THE AO. 4. AFTER CONTAINING THE ORDERS OF AO AND LD. CIT (A ) AND WRITTEN SUBMISSIONS FILED BY ASSESSEE WE FIND THAT ASSESSEE DESERVES TO SUCC EED IN THIS GROUND. THE RENT PAID BY ASSESSEE HAS NOT BEEN DOUBTED BY THE AO. HOWEVER THE DAILY EXPENSES INCURRED ON MAINTENANCE OF GUEST HOUSE AND ON THE STAFF WHILE S TAYING IN THE GUEST HOUSE WERE DOUBTED. LEDGER ACCOUNT CONTAINING EXPENSES WAS PR ODUCED SHOWING THE DETAILS OF EXPENSES WHICH WAS NOT FOUND INCORRECT. THEREFORE WE ARE OF THE VIEW THAT DISALLOWANCE MADE BY AO AND CONFIRMED BY LD. CIT (A) WAS NOT JUS TIFIED. ACCORDINGLY WE DELETE THE ADDITION OF RS.73 028/-. 5. NEXT ISSUE RELATES TO UPHOLDING DISALLOWANCE @ 2 0% ON ACCOUNT OF CONVEYANCE EXPENSES AND DEPRECIATION ON CAR FOR PERSONAL USE. 6. THE LD. CIT (A) HAS CONFIRMED THE DISALLOWANCE. 7. AFTER CONSIDERING THE SUBMISSIONS WE FIND THAT THE DISALLOWANCE IS ON HIGHER SIDE. THEREFORE WE RESTRICT THIS DISALLOWANCE TO 10% AGA INST 20% DISALLOWED BY THE LD. CIT (A). THE AO IS DIRECTED TO RE-COMPUTE THE DISALLOW ANCE ACCORDINGLY. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED IN PART. 9. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28. 7.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER 3 JAIPUR D/- COPY FORWARDED TO :- M/S. AAVAHRNAM MARKETING JAIPUR. THE DCIT CIRCLE-6 JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 279/JP/2011) BY ORDER AR ITAT JAIPUR.